Abbott to jack up taxes for small business by $5 billion

This massive tax hit would target Australia's 3 million small businesses that provide work to 4.8 million Australians.

The Coalition is proposing to:

• Reverse the increase in the instant asset write off from $1,000 to $6,500
• Remove the accelerated initial deduction for motor vehicles
• Abolish Loss Carry-Back

Under the Liberals, 1.4 million small business owners will also face a tax hike when they lose the benefit they received from the increases in the tax free threshold from $6,000 to $18,200.

If he is elected, Tony Abbott will be ripping $5 billion out of the small business sector by abolishing a range of important tax concessions and increasing personal income taxes for sole traders.

Mr Abbott cannot pretend to be a friend to small business and then slug the sector with a $5 billion tax hike.

Mr Abbott's plan to increase taxes for 3 million of Australia's hard working small businesses will have a direct impact on their capacity to grow their business and employ Australians.

BACKGROUND - Examples of how the Coalition's policies will impact on small businesses

• A newsagent with a turnover of $1.5m, which over the year purchased a delivery van for $25,000, display shelving for $6,000, new computers for $4,400, a new cash register for $3,000 and a new fridge for $4,000:
  • Stands to lose a cash flow benefit of $5,712 in the first year under Tony Abbott
  • This is on top of the $5,000 slug the newsagent will have to pay to get the NBN connected so they can offer online services.
• An at home hairdresser, who earns $25,000 (taxable income) a year:
  • Stands to lose a tax cut of $503 under Tony Abbott.
• A builder with 4 staff, with a turnover of $1.9m a year, who benefits from Loss Carry-Back when they adapt their business to take advantage of a new business opportunity.
  • Stands to lose a $300,000 tax refund for the first income year and a further $30,000 the following year under Tony Abbott.
• An owner-operator truck driver earning $65,000 (taxable income) that also purchases a new ute for their work.

  And Tony Abbott will hit the two biggest sectors for small businesses:

  • Stands to lose $1,748 in the first year under Tony Abbott.
    • Over the four years to '16-17:
      • The retail sector will pay an extra $930 million tax; and
      • The construction sector will pay an extra $860 million tax.